State-backed Citizens Property Insurance grows

Julie Patel, Sun Sentinel

In the past four months, Citizens Property Insurance grew by 107,511 new policies.

The expansion — from 1,026,597 policies on Jan. 31 to 1,134,108 policies on June 11 — is considered the largest growth in several years for state-backed Citizens, Florida's largest property insurer, and it may signal a shift for the insurer, which legislators have tried shrinking in recent years.

The growth is largely due to the recent demise of two insurers that have taken on more than 100,000 Citizens policies in recent years: Magnolia Insurance in Coconut Grove and Northern Capital Insurance in Miami and its former subsidiary Landmark One Insurance. The companies have been liquidated by the state.

The Office of Insurance Regulation also recently approved allowing four insurers to return a combined 23,700 policies to Citizens: 13,506 for Sunshine State Insurance, 3,978 for Argus Fire & Casualty Insurance, 3,717 for First Home Insurance and 2,500 for Homeowners Choice Property & Casualty.

A fifth insurer also indicated it would ask to return about 2,000 policies.

A state program aimed at encouraging companies to take over Citizens policies rewarded eligible companies in past years with bonuses for doing so. Under that program, First Home received $5.2 million in 2009 and Argus received more than $1.9 million for policies they took from Citizens three years before.

HomeWise Preferred Insurance Co., which also took Citizens policies, plans to drop 10,000 policies when they are up for renewal and transfer the rest of its roughly 100,000 policies to an affiliate, HomeWise Insurance Co.

Citizens is also expected to grow as State Farm drops 125,000 residential policies starting in August.

State Farm, which had planned to prevent its agents from transferring policies the company dropped to other private insurers, agreed to allow agents to do so as part of a recent agreement with regulators. The impact on Citizens is unclear.

Mike Sunberg, co-owner of Barkley Insurance in Fort Lauderdale, said private insurers want to snag some of those policies. He said his agency moved about half of the roughly 400 policies it services that were covered by Magnolia and Northern Capital to private insurers and the rest to Citizens.

But it wasn't easy. "We had over 400 policies we had to rewrite by May 30 and we had one month's notice," Sunberg said.